The ISO/IEC 20924:2018 definition of an Internet of Things (IoT) device is, “entity of an IoT system that interacts and communicates with the physical world through sensing or actuating.” Interaction with the IoT system means automated data exchange and interaction with other elements to create the system. Unfortunately, developing IoT standards interpret IoT very broadly as meaning, “any device with a processor and IP address to exchange data” regardless of what “space” it’s used in, such as monitoring individuals or controlling industrial processes, substations, railways or buildings.

As automation and control professionals, we likely use IoT devices in one form or another in our personal lives. They’re part of the consumer market. Despite IoT devices appearing “almost everywhere” with billions of devices, they only represent about 25-30% of the total IoT device market by value. The balance is part of the business-to-business (B2B) or Industrial Internet of Things (IIoT) market, which is growing at rates approaching 20% compound annual growth (CAGR).

The IIoT market is driven by large­scale asset digitization and the benefits/ROI associated with predictive maintenance and automation, as well as modernizing transportation, utilities and related infrastructure that underly the smart city concept.

So, what makes IoT industrial?

The most obvious difference between IoT and IIoT is being able to operate for extended periods in a range of temperatures, humidity/rain, dust and vibrations. These environments also drive more expensive enclosures, as well as the need to meet area classification requirements. These safety and electrical certifications are more rigorous than in the consumer IoT space. Depending on the application, IIoT devices may update infrequently, while others update on a regular scan cycle like wireless sensor networks.

IIoT also requires better accuracy, typically ±0.1–1% versus ±1–5% for an IoT device. IIoT devices also need to be calibrated to maintain accuracy over their 10- to 30-year lifespans. To achieve this level of reliability, especially when used in safety applications, IIoT devices require graceful degradation, rather than abrupt failures. Consequently, they incorporate features such as redundancy of critical components to achieve continuous operation without interruption.

As indicated earlier, the number of IoT sensors is orders of magnitude greater than IIoT sensors. However, the market value is flipped the other way. Why? Because IoT sensors are available from $5 to a top range of about $300. IIoT sensors, because of their requirements, start at about $100.

IoT interoperability and integration is API­driven through the cloud, while IIoT systems use protocols to support real-time, reliable messaging to connect to real-time, data­driven environments.

I believe renewable energy and the electrification of society will drive broader demand for IIoT. Solar panels and electric vehicles (EV) show how consumer decisions impact the grid. However, most home systems aren’t connected to buy and sell electricity into the grid, and must be integrated with the control plane of grid operators, aggregators and utility companies.

Energy companies and utilities represent about 25% of the IIoT space, with renewables occupying about 25% of it. As electrification increases, not only in North America but also other parts of the world, the need for consumer and industrial integration will continue to grow. This growth will drive convergence of IIoT capabilities to IoT devices, muddling the line between them. The same happened when commercial off the shelf (COTS) technologies were repurposed for operations technology (OT) environments.